Canberra April 2018

The month in review: Canberra

By Herron Todd White
April 2018

It is a well known fact that the ACT property market, like most other ACT industries is heavily reliant on the presence of the public service. This means that the property market is not as susceptible and reacts differently to events in the national property landscape. While the ACT market is still affected by interest rates, migration and unemployment rates, the reaction is normally less dramatic compared to other capital cities.

With a large percentage of the population employed by the government, there can be peaks and troughs in the property market which correlate to political cycles. For example, in the lead up to a federal election, buyers may be more tentative as they are unsure of job security. This can lead to a lull before the election and then a flurry of activity afterwards. New policies to decentralise government departments outside of Canberra can also spark hesitation in the market with buyers unsure of their futures in the ACT.

On a more local level, town centres such as Woden, Belconnen and Tuggeranong are heavily reliant on the presence of government department offices. All these town centres have large numbers of public servants working in or nearby which has helped absorb some of the many apartments that have recently been completed in these areas. Despite this, the apartment market continues to be sluggish as more developments are introduced to the market.

The high percentage of public servants in the ACT means the average household income is relatively high compared to other cities. This is represented in the cost of detached housing in Canberra. Although the ACT has not seen growth quite as strong as Sydney or Melbourne over the past few years, it has still been profitable for many homeowners. The start of 2018 has seen a very slight decrease in capital value growth which may be a sign of the market correcting itself although there are still signs of a strong robust market. There has also been a lot of market activity over the first few months of 2018 in all regions of the ACT.

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